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American Apparel founder and CEO Dov Charney has been the subject of sexual harassment suits and scrutiny from immigration officials over irregularities in his employees' work documents, and now, his troubles have caught up with him: the American Apparel board of directors announced late Wednesday night that they have voted to terminate Charney "for cause." It's an announcement investors were clearly eager to hear, as the stock is up more than 19% in early Thursday trading.

American Apparel's board of directors has voted to suspend Charney effective immediately and said that after the necessary 30-day cure period (as dictated by Charney's contract), Charney will be terminated. The board also said that concurrent with Charney's termination, it will request his resignation as a member of the board.

"We take no joy in this, but the Board felt it was the right thing to do,” Mayer said in a statement. “Dov Charney created American Apparel, but the company has grown much larger than any one individual and we are confident that its greatest days are still ahead.”

John Luttrell, who currently serves as the retailer's executive vice president and CFO, has been nominated as Charney's interim replacement.

"The board is working with a search firm to identify candidates for the job of permanent CEO and, based on our initial discussions with the search firm, we expect the list of possible successors will be impressive,” added David Danziger, the other nominated co-chairman.

American Apparel also said Thursday that as a result of these management changes, the company may have been deemed to have triggered a default, and as such, will be "in discussions with lenders for a waiver of the default."

Though the retailer said Charney's termination was "for cause" and the result of an investigation into alleged misconduct, it was not immediately clear which of Charney's actions may have done him in. The company had previously defended him in the wake of sexual harassment charges, calling those claims "meritless." The retailer's financial performance could be seen by some as reason enough to make the change: in its first quarter earnings report, the company posted a 7% drop in same-store sales compared to a 5% increase in the prior-year quarter, and shares of American Apparel, which in 2007 traded as high as $15 per share, have seen their value nearly cut in half since the first trading day of 2014 and are now worth less than a dollar.

Following news of Charney's termination, American Apparel stock surged is currently up more than 19%. Because of the stock's low price, however, the gains only amount to about 11 cents per share.